Dear Monty: The downside to a tough negotiation

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By Richard Montgomery

Middletown Transcript

By Richard Montgomery

Posted Oct. 17, 2012 at 12:11 PM

By Richard Montgomery

Posted Oct. 17, 2012 at 12:11 PM

GHNS

Reader question: If a buyer has a contract on a house, home inspection was done and the buyer’s attorney filed a letter to the seller’s attorney that all work has to be done by the seller and have not received a response, can the listing agent put this property listed on the market with a lower amount than the original offer from the buyer? Lou.

Monty’s answer: This is an excellent question. If the purchase agreement is drafted correctly, the answer to your question is in the contract. One of the most common causes of disagreements between buyers and sellers is a contract where the answers are not clear. Because each party has an attorney, my suspicion is that the contract is drafted in such a fashion that the seller has no obligation or right to cure. The buyer’s attorney letter to the seller’s attorney was in all likelihood a counter offer, which the seller rejected by not responding. If that is the case, the answer to your question is “yes.”

Your attorney is in a much better position to answer your question than I. While attorneys can and do make mistakes in real estate transactions, they are far less likely than errors caused by real estate agents.

It seems odd to me that your agent or the listing agent did not communicate the seller’s intentions to put the home back on the market. There was no attempt to persuade you to proceed without the repairs? Perhaps it was because your attorney positioned the letter to the seller as a “best and final” offer. Your question did not reveal enough to discern who, if anyone, dropped the ball here.

Real estate inspections can and do cause transactions to fail. I believe there is a way this issue can be prevented. It can be prevented if the seller has an inspection completed before placing the home on the market and doing any necessary repairs up front.

Having the inspection on the kitchen table that details the work needed and a completed work order from a competent contractor will avoid the types of issues discovered here. When the home goes on the market, the inspection has been properly dealt with and is a thing of the past.

I recommend sellers have required work discovered by the inspection to be completed by a contractor. If it is a small item and the seller is proficient, or has worked in the trades, it may be fitting that the seller completes the task(s). Buyers often come back to the seller after the closing to declare the work unsatisfactory. To paraphrase a common statement, “They installed the cheapest part they could find.” is a common reaction. Having the repairs completed before the buyer even appears is the best solution.

Page 2 of 2 - If a seller chose not to take my recommendation, then, buyers should take the opposite approach, in most cases. If an inspection reveals repair or replacement issues the buyer should take responsibility for the work and have it done in the fashion and to the level of quality they demand. They avoid the problems encountered here. Most of us have different levels of performance and acceptance criteria in matters of repair and replacement.

I have authored three articles you may find helpful. They add considerable more information to this answer than space here allows. “Home Inspections.” “Home Buying and Selling Negotiations.” and “Home Buying and Selling Contingencies.”

Lou, thanks for asking your question, I enjoyed answering it. I hope the information is beneficial. If there are other questions, please ask me.

Richard Montgomery gives no-nonsense real estate advice to readers’ most pressing questions. He is a real estate industry veteran who has championed industry reform for more than a quarter century. You can ask him your questions at DearMonty.com by clicking the “Ask Monty” button.”